Let’s face it: Microsoft software licenses are expensive. And that’s just the way the folks in Redmond want it. Otherwise, that $62 billion a year revenue stream might drop to a mere $52 billion.

But customers shouldn’t cry for Microsoft. Instead, if they choose Microsoft products over cheaper open source alternatives, they should take a hard line in negotiations to get as much as they can for as little money as possible.

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But managing software licenses may be just as difficult as managing the software itself. That’s why Forrester Research just came out with a report titled “Consider These Five Criteria When Choosing a Microsoft Volume Licensing Program.”

The report details five questions customers should ask before signing a new license agreement, focusing primarily on Microsoft’s Enterprise Agreement and Software Assurance subscriptions. Let’s take a look at each one.
1. What price can you get?

This first question may seem obvious, but Forrester analyst Duncan Jones says too many customers fail to examine their options. “To get the best price, the buyer must be able to walk away from an inadequate EA (Enterprise Agreement) offer and go for a cheaper alternative, be it buying from the Select Plus program, delaying upgrades, or migrating to competing products,” Jones writes. “Similarly, there is no need to reject the EA program until you’ve given the Microsoft sales team a chance to offer you a compelling deal.”

For products like Windows and Office, Enterprise Agreements may offer the best deal for businesses with at least 250 PCs, according to Forrester. The EA includes Software Assurance, which provides access to future product versions, the ability to move licenses from on-premises deployment to a cloud network, and other benefits. There is also a leasing version of the EA called the Enterprise Subscription Agreement.

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For a couple of examples, A Windows Select Plus license costs $147 while a Windows Enterprise Agreement license costs $186. An Office Professional Select Plus license costs $399 and an Office Enterprise Agreement license costs $636.
2. When will you upgrade again?

The Enterprise Agreement and Software Assurance add to the price of a license, but the ability to upgrade — say, from Windows 7 to Windows 8 — without paying a second time may make it worth it.

Software Assurance agreements typically last three years, giving customers product upgrade rights if a new software version is released during that time. Then again, Microsoft may not come out with a new version, or your organization may decide the cumbersome process of upgrading isn’t worth it.

“You are in effect making a bet on whether or not your organization will want to upgrade to the next product versions that Microsoft releases,” Forrester writes.

With the Enterprise Agreement and Software Assurance, you’re essentially “getting two versions for the price of one and a half.”